When using Bitcoin for the first time, it may feel like stepping out of your comfort zone.
Even though Bitcoins are often called "digital cash", they are intangible, so you can't hold them. Hence a need to securely store, send and receive them. Bitcoin wallets were developed so that you could do all that without breaking a sweat.
Here are 3 main terms you need to familiarize yourself with:
Bitcoins, a Bitcoin address and a Bitcoin wallet
Bitcoins (often spelled 'bitcoins') are in fact the digital equivalent of cash.
Once initially created through the process called "mining", all bitcoins are attached to the so-called Bitcoin addresses (also referred to as Bitcoin public keys). Any Bitcoin address looks like this - 1BoatSLRHtKNngkdXEeobR76b53LETtpyT. If you make a Bitcoin payment, it means that you transfer bitcoins from one Bitcoin address to another one.
A Bitcoin wallet is essentially a Bitcoin equivalent of a bank account. If need be, you can create an unlimited number of Bitcoin addresses and your wallet can store all of them for you. Bitcoins can be sent from, received and stored in Bitcoin addresses.
In a sense, think of a Bitcoin wallet as a keyring to all your Bitcoin addresses.
Plus, some of the Bitcoin wallet providers offer options to buy and sell bitcoins directly with them.
There are several main types of wallets.
Desktop wallets are the ones that you install directly on your own computer.
Web wallets are hosted by a trusted third-party and can be accessed via browser.
Mobile wallets can be used on iOS and Android mobile devices.
Hardware wallets are a special type of bitcoin wallets that stores user's private keys on a secure hardware device.
We will focus on the web and mobile wallets as they are the most beginner-friendly Bitcoin wallets out there.
Blockchain is one of the largest Bitcoin wallet providers that offers arguably the easiest-to-use Bitcoin wallet in the world with over 15M active users at the time of writing.
All you need to do to start using it is:
- sign up using email.
- receive and save your account's unique identifier (random combination of letters, numbers and dashes) and a security phrase.
- It is also highly recommended to enable a 2-factor authentication to enhance account security.
Blockchain.info is also now offering a buy/sell bitcoins option via its integrated exchange partners. At the time of writing this is available to customers from 34 European countries. But even if your country is not in the list yet, it's still worth creating a wallet with them as they are actively expanding their network of buy/sell partners, more countries will be served soon.
Blockchain's web wallet is also complemented by their iOS and Android apps, so you can have the best of both worlds by using your wallet both from your computer and on the go.
Breadwallet offers a simple, secure and easy-to-use wallet for iOS and Android phones. Also, it's truly mobile as it does not use any web servers that may get hacked or go down for maintenance, everything takes place directly on your phone.
All you need to do is download it to your phone, create a new wallet and memorize or write down 12-random words that will serve as a security phrase. You will need it in case your phone is broken or lost.
Once you are through with that, you can immediately send and receive Bitcoins via the Breadwallet app on your phone. To send, just use the built-in QR code reader or paste previously copied recipient's bitcoin address from clipboard. To receive bitcoins, you can simply let others scan the QR code of the bitcoin address linked to your Breadwallet or send it to anyone as email or message. It really is that simple.
To begin using their services, you need to sign up at Coinbase and verify your email address and phone number. Immediately after that you will gain access to your Coinbase account that doubles as a Bitcoin wallet. Once inside, you will find options to send and receive bitcoins to and from anyone in the world. Should you wish to use their buy/sell services, you'd be need to verify your ID first. Once done you'd be able to buy bitcoins with a credit/debit card and bank transfers.
If you plan on storing larger amounts of bitcoins in a wallet ($10k+ worth in bitcoins), please consider switching to more secure hardware (e.g. Trezor or Ledger Nano) or even paper wallets.
One of the best things about Bitcoin, though, is that you do not have to stay married to any one particular wallet and can freely move your bitcoins from one wallet to another. Once again, a Bitcoin wallet is just a virtual keyring.
Need help with Bitcoin wallets? Please reach out to our customer support representatives and we will walk you though.